As Cloud Computing becomes more prevalent onsite hardware sales will feel the impact. However the Cloud has manifested itself in many forms and distributors will not necessarily suffer on all fronts.
Distributors must stay relevant to solution providers as the technology landscape shifts. The danger for distributors is that solutions providers start dealing directly with Cloud providers, and miss out the distribution middle man.
Cloud Computing is not just another fad which distributors need to slightly adjust their business model to. In the past businesses tweaked their models through charging for services they had produced for free, such as tech support.
The Cloud phenomenon is different and appears to be here to stay, leading to distributors having a bit of an identity crisis. They want to get in on the action, especially as the industry is set to become a $241 billion industry by 2020. However they are unsure where they fit into the equation.
UBM estimate that up to 38% of all IT expenditure is going to move to purchasing off-premise solutions by 2013. To meet this a third of all solution providers are aiming to change their business model within this time period.
Where distributors may not loose out so badly is within the Private Cloud space. In this market companies are buying hardware in order to produce a Cloud infrastructure behind their own corporate firewalls. IDC estimates that Private Cloud implementations will grow at an annual rate of 28.8% through to 2015.
It is the SMEs which are more likely to jump two footed into a Public Cloud solution hosted by a 3rd party provider, producing no need for a distributor. This is the market where distributors they will loose out, and could be labelled as unnecessary purchasing mechanisms.
So what about the distributors who are supplying the Cloud providers themselves? There is a harsh irony in the way that IT distributors have supplied Cloud providers in the past few years inadvertently supplying the force that hopes to steal their sales. However distributors have no choice other than to supply the future.
For distributors the future is unsure but may not be a gloomy as some would have you believe. In the past they have proven to adapt well to changes in computing. The task now is to establish a firm identity in the Cloud space. Perhaps the safe option would be to specialise in working with companies implementing Private Cloud solutions.
